Home / Case Studies / NeuroCare Diagnostics

NeuroCare Diagnostics: Medical AI Regulatory Journey

Early-stage medical AI startup navigating complex healthcare regulations for neurological diagnostic tool

Medical AI

EU AI Act

MDR

FDA SaMD

HIPAA

Neural Analysis

Medical Device

Clinical Safety

Industry

Medical AI

Company Size

14 employees

Timeline

5 months

Compliance Improvement

29% → 78%

Executive Summary

NeuroCare Diagnostics, a medical AI startup developing tools for early detection of neurological disorders, faced complex regulatory challenges across multiple jurisdictions. Using Veritas, they reduced their regulatory preparation time from 18 months to 5 months, secured additional funding, and created a clear pathway to market approval.

The team had to navigate overlapping requirements from the EU AI Act high-risk system provisions, Medical Device Regulation, FDA Software as a Medical Device framework, and HIPAA privacy protections to ensure their algorithm would meet both regulatory and business requirements.

Company Profile

NeuroCare Diagnostics is a 14-person startup developing AI-powered diagnostic tools for early detection of neurological disorders. Their primary product is an algorithm that analyzes brain imaging data to identify markers for conditions like Alzheimer's disease, potentially enabling earlier intervention.

Founded by two neuroscientists and backed by $4.2M in venture funding, the company operates at the intersection of healthcare and AI—two heavily regulated domains. They currently have a working prototype with promising pilot results but remain pre-market.

78%

Final Compliance Score

5-month implementation timeline

Business Challenge

NeuroCare faces a multi-layered regulatory challenge across multiple jurisdictions and standards:

High-risk AI classification The algorithm falls under EU AI Act high-risk designation for healthcare applications, requiring rigorous risk management, documentation, and transparency.

Medical device regulation The EU Medical Device Regulation (MDR) and FDA Software as a Medical Device (SaMD) frameworks impose stringent clinical evidence, quality management, and post-market surveillance requirements.

Health data privacy compliance Processing sensitive health data triggers strict HIPAA, GDPR, and other privacy regulations, with cross-border transfer limitations complicating research collaborations.

Limited regulatory expertise As a small science-focused startup, NeuroCare lacks in-house regulatory expertise, and traditional regulatory consultants lack AI-specific knowledge.

Investor pressure Venture investors demand clear regulatory strategies and timelines, with next funding round contingent on demonstrating viable paths to market.

"We're drowning in regulatory requirements. Our scientists understand neurology, not compliance. We don't have the resources for a dedicated regulatory team, but without proper compliance, we can't get to market." — Dr. Maya Chen, CEO at NeuroCare Diagnostics

Veritas Implementation

NeuroCare adopts Veritas to navigate this complex regulatory landscape:

1. Regulatory Classification Analysis

Veritas analyzed the algorithm's characteristics against multiple frameworks simultaneously, identifying it as a Class IIa medical device under MDR, Class II SaMD under FDA, and high-risk AI system under EU AI Act.

2. Requirements Deduplication

The platform identified overlapping requirements across regulatory frameworks, creating a unified compliance checklist that eliminated redundant work while ensuring comprehensive coverage.

3. Documentation Generation

Specialized documentation templates were created for Technical Documentation, Clinical Evaluation, Algorithm Impact Assessment, and Risk Management File to satisfy the requirements of all applicable regulations.

4. Minimal Viable Compliance

Veritas prioritized regulatory requirements for each development stage, identifying the subset of documentation needed for initial research clearance versus full market approval.

5. Regulatory Roadmap Creation

A comprehensive timeline was developed, mapping specific regulatory milestones to product development stages, creating clarity for both the team and investors.

Business Outcome

13 Months

reduction in regulatory preparation time compared to traditional consulting approaches

$2.5M

additional funding secured based on clear regulatory strategy and compliance progress

3 New

research partnerships established with compliant data transfer mechanisms

Clear Path

to obtaining regulatory approval across multiple jurisdictions simultaneously

Detailed Implementation

Month 1: Initial Assessment and Classification

NeuroCare's leadership team engaged with Veritas, providing comprehensive information about their neural imaging algorithm, target markets, and development stage. Veritas initiated a multi-framework classification analysis, which revealed overlapping but distinct requirements under EU AI Act, MDR, FDA SaMD, and HIPAA regulations.

Month 2: Requirements Harmonization

The platform's Regulatory Expert agent created a unified compliance framework that mapped requirements across jurisdictions, identifying where a single document or control could satisfy multiple regulatory obligations. This process reduced the documentation burden by 37% through strategic alignment of evidence.

Month 3: Clinical Validation Framework

Veritas's Documentation Specialist agent developed templates for clinical validation protocols that simultaneously satisfied FDA, MDR, and EU AI Act requirements. This included specific guidance on dataset diversity, bias testing, and performance metrics needed to demonstrate both safety and efficacy.

Month 4: Quality Management System Implementation

The Compliance Architect agent guided NeuroCare through establishing a lightweight but compliant Quality Management System that incorporated AI-specific risk management, algorithm version control, and change management processes required for medical software.

Month 5: Regulatory Strategy and Funding Documentation

In the final phase, Veritas generated a comprehensive regulatory roadmap with specific milestones tied to both product development and funding stages. This documentation became central to NeuroCare's investor presentations, demonstrating a clear path to market that satisfied investor due diligence requirements.

Before & After Comparison

Before Veritas

Unclear regulatory classification across frameworks
Estimated 18+ month regulatory preparation timeline
No structured approach to managing overlapping regulations
Unable to conduct multi-center research due to data transfer issues
Quoted $350,000+ for traditional regulatory consulting
Investor concerns about regulatory risks
29% overall compliance score

After Veritas

Definitive classification and requirements mapping
5-month implementation for critical compliance components
Unified compliance approach reducing redundant work
Compliant data sharing agreements with research partners
73% cost reduction compared to traditional consulting
Secured additional funding based on regulatory progress
78% overall compliance score

Key Takeaways

Lessons from NeuroCare's Compliance Journey

Early integration of regulatory considerations into product development dramatically reduces time-to-market for medical AI.

A unified approach to overlapping regulations creates efficiencies that make compliance feasible for startups with limited resources.

Prioritizing requirements by development stage allows for earlier research activities while building toward full market approval.

Clear regulatory documentation significantly improves investor confidence and supports fundraising efforts for medical AI startups.

Ready to navigate complex medical AI regulations?

Discover how Veritas AI can help your organization create a clear pathway to regulatory compliance and market approval.

Start Free Trial Schedule a Demo